How to Find an Assumable Loan

By LaoA

Finding an assumable loan does not occur very often. Buyers who obtain an assumable loan simply assume the mortgage of the person selling the home and continue to send the remaining monthly payments on the loan to the lender. A person who ends up buying a property in this manner could acquire a great deal in the process. Below are a few steps to help anyone find an assumable loan.

Search the newspapers in your area. Look for the words "assumable," "assume," and "may be assumable" in the real estate "for sale" section of your local newspaper. If you do not have much money, you can even look for assumable loans in the real estate section at a local bookstore.

Visit property listing websites. You can see what properties are for sale on various websites such as Realtor.com. Read all of the details in the property listing to find out if the loan is assumable. Using these websites will allow you to see pictures of the home, take virtual tours, and obtain the contact information of the real estate agent who is listing the property. Refine your search using search features such as price, square feet and location.

Contact a local Realtor via telephone. Find out if the agents you call have property listings in which the seller is extremely motivated to sell their home. If the sellers whom the Realtors represent need to move quickly for some reason, they may allow you to assume their mortgage.

Find a loan from the Veteran's Administration. Be prepared to pay a fee to assume the mortgage if it was made prior to March 1, 1988. You must pay both the originator of the loan and VA to assume loans made before March 1, 1988. Any VA loans that were made by lenders prior to March 1, 1988, are also assumable and do not require the buyer to obtain a credit check. Remember that you may have to meet the qualifying terms of the lender, which may vary.

Hire a qualified attorney to look over the loan documents to ensure it is assumable and to perform the real estate closing.

Understand all of the terms of the assumable loan which can include adjustable interest rates and a due on sale clause which can cause the entire sum of the loan to be called due in the event of a mortgage transfer.

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